International Journal of Managing Value and Supply Chains (IJMVSC) Vol.5, No.

2, June 2014
DOI: 10.5121/ijmvsc.2014.5203 21

FACTORS AFFECTING CUSTOMERS BUYING
DECISIONS OF MOBILE PHONE: A STUDY ON
KHULNA CITY, BANGLADESH

Md Reaz Uddin
1
Nusrat Zahan Lopa
2
and Md. Oheduzzaman
3

1
Assistant Professor, Business Administration Discipline, Khulna University,
Bangladesh
2
Assistant Professor, Business Administration Discipline, Khulna University,
Bangladesh
3
Independent Researcher, Khulna

ABSTRACT

Mobile phone has diverse usages to different users in accordance with their necessities. With dramatic
increase in mobile phone usage in recent years, people take into account various factors while they decide
purchasing a mobile phone. This study has put efforts to uncover the underlying factors those affect
customers in choosing mobile phone. Data were collected from those people live in Khulna city
maintaining equal ratios of various groups like male, female, businessmen, employees, students and others
(mostly housewives). To select desired respondents, convenient sampling method was used. A structured
questionnaire designed based on previous study with five point Likert scale was used to interview
respondents. Factor analysis was applied to extract the underlying factors affect mobile phone purchasing
decision. The results show that the most important factor is physical attributes. Some other factors are
pricing, charging and operating facilities, size and weight, friends and colleagues recommendations,
neighbors recommendations and advertising.

Key words: Mobile Phone, Purchasing Decisions, Customer Choice

1. INTRODUCTION

Communication is one of the most talked topics in todays business world. Among the different
modes of communication, mobile phone is becoming reliable and efficient vehicle to reach from
one person to another. This is the prevailing device through which we can now express ourselves,
get our work done and share our joys and hurts. This picture was not seen almost two decades
back when most of the people of this country were solely dependent on BTTB (Bangladesh
telegraph and telephone board).

It was early nineties, the mobile phone handset first launched in Bangladesh with a very small
number of penetration rate. At that time very few people were able to afford mobile phone as
they faced different sorts of barriers. In 1997, Nokia started its operation in this country and
presently operating a number of selling points in Bangladesh. Siemens and Samsung started their
operation after launching it.

In this modern era, a wide variety of other services such as email, text messaging, MMS, internet
access, audio and video, short range wireless communications (Inferred, Bluetooth), gaming etc.
are also supported by the mobile phones. In addition to these, it also offers more general
computing capabilities that are referred to smart phone. In Bangladesh many mobile phone
brands are available e.g. Nokia, Samsung, Sony, HTC, Panasonic, Motorola, LG, Symphony,
Micromax, Walton etc. and consumer choose their preferred mobile phone from this pool.
International Journal of Managing Value and Supply Chains (IJMVSC) Vol.5, No. 2, June 2014

22

This study has been designed with intention to identify the factors affect customers to choose
their mobile phone. It focuses on probable reason that the customers consider to make their
purchase decision regarding mobile phone.

2. LITERATURE REVIEW

There are many social and interpersonal factors that influence customers to decide about any
product and so happen in mobile phone also. Consumer behavior is affected by a lots of
variables, ranging from personal motivations, needs, attitudes and values, personality
characteristics, socio-economic and cultural background, age, sex, professional status to social
influences of various kinds exerted by family, friends, colleagues and society as a whole
(Moschis, 1976).

Liu (2002) in a recent paper analyzed factors affecting the decision regarding brand in the mobile
phone industry in Asia. It was found that the choice of a mobile phone is characterized by two
distinct attitudes towards brands: attitudes towards the mobile phone brand and attitudes towards
the network. Customers choice of mobile phone brand is affected largely by new features more
than size. This trend of choosing is definitely towards phones with better capacity and larger
screens.

According to a latest report given by In-Stat/MDR (2002) research institute, color displays are
now driving consumers into stores to purchase new mobile phones and related devices such as
PDAs (personal digital assistants). The result that customers choice criteria depends more
importantly on color display than higher data rates or new features though the fact that the
review of other studies had not cited the importance of color display. The report also indicates
that the customers demand for color display handsets is increasing and it is expected that in this
21
st
century all cellular phones and PDAs are equipped with color display.

Dorsch, Grove and Darden (2002) in their research on customer choice of mobile phone found
that from the perspective of marketing consumers purchase process can be classified into a five
step problem solving process such as: need recognition, information search, given alternatives
evaluation, purchase activity and post purchase evaluation. This five step process of decision
making is most appropriate for the problem solving behavior of purchase making decision or
complex decision purchase process. Similarly purchase decision for mobile handset pursues the
same buying process but in some cases the decision may also be influenced by symbolic
preference associated with some brands.

Before purchasing mobile phone consumers take some general conditions into consideration.
Considering the classical problem solving buying process behavior, it is almost always a case
that consumers go for information search before taking purchase decision. There is also a
common behavior that consumers decision of purchasing is directed by previous likings for
some specific alternatives. It shows that customers formulate their purchasing decision based on
the limited information search activity that they performed (Moorthy, Ratchfordand, Talukdar,
1997) rather than a detailed evaluation of all possible alternatives (Chernev, 2003).

Besides information search evaluation of alternatives is an important activity that determines
consumers choice (Laroche, Kim and Matsui, 2003). They opined that customers purchase
decision is influenced by `cognitive heuristics` or in simple words a consumer choose his
perceived brand based on his past experience if it fulfills his perceived values.

Swait and Adamowicz(2001) found that a lot of decision behavior exercised by purchasers can
be different from one individual to another because customers may use different approaches to
make their choices rather only using mathematical modeling.

A prospective buyers decision of buying a product or brand may be influenced by personal
preferences and perspective of buying may have a greater effect on brand choice if the customer
International Journal of Managing Value and Supply Chains (IJMVSC) Vol.5, No. 2, June 2014

23
has little subsequent knowledge or experience about the product. The conventional problem
solving technique that is used in making purchasing decision that affects buyers preference
might not be the best approach in all conditions. Mobile phone selection can either be based on
functional/primary/rational factors or it can be based on emotional factors such as: fun, pleasure,
excitement etc. (Batra and Ahtola, 1990).

A lot of consumers choice may be having both rational features (e.g communication, time
management) as well as emotional features (e.g games, music, camera, and application). The
younger the consumer the more he would prefer emotional rather than rational features in mobile
phones (Wilska, 2003). Customers decisions of purchasing mobile phone depend on rational as
well as emotional factors.

Requelme (2001) conducted an experiment to identify the quantity of self-knowledge consumers
have when choosing between mobile phone brands. The study was built upon six key attributes
(telephone features, access cost, connection fee, mobile to mobile phone rates, call rates and free
calls) related to mobile phone purchasing respondents had to importance rate.


3. METHODOLOGY

This study was conducted to know the factors affect people decisions of mobile phone
purchasing. Primary and secondary data were collected from appropriate sources for collecting
data. A structured questionnaire with five point likert scale was used to collect the opinions of
respondents. To select the respondents, convenience sampling method was used. A total of 200
respondents were interviewed from them 160 were found flawless thus used for data analysis.
Factor analysis and descriptive statistical tools were applied with SPSS for data analysis.

4. ANALYSIS AND FINDING

The data presented in the above table indicate that the sample is equal with both male and female
respondents as they are indicated by 50 percent for both. Age analysis of respondents indicates
that most of the respondents fall in the age group of 19-25 years as it was indicated by 21.2
percent respondents in the sample. Occupation shows that in case of service and students the
respondents are 45 that indicate 28.1 percent for both and Business and Housewives include 35
respondents each that indicate 21.9 percent. In case of income level the most respondents fall
under the income level of above 20000 that shows 30.6 percent.

Table 1: Demographic characteristic of respondents

Categories Count Percentage
Gender Male
Female
80
80
50
50


Age group
Below 18
19-25
26-30
31-35
36-40
Above 40
14
34
31
29
22
30
8.8
21.2
19.4
18.1
13.8
18.8

Occupation
Service
Students
Business
Housewives/Others
45
45
35
35
28.1
28.1
21.9
21.9
International Journal of Managing Value and Supply Chains (IJMVSC) Vol.5, No. 2, June 2014

24


Income Level
Below 5000
6000 to 10000
11000 to 15000
16000 to 20000
Above 20000
40
26
23
22
49
25.0
26.2
14.4
13.8
30.6
5. FACTOR ANALYSIS










The result obtained from 160 respondents had been thoroughly analyzed and the outputs of the
results had been clearly explained in this section. To analyze the strength of association among
variables the Kaiser-Mayer-Olkin (KMO) measure of sampling adequacy was applied. The KMO
measure of sampling adequacy was computed to determine the suitability of using factor
analysis. It certifies whether data are suitable to perform factor analysis. The value of KMO
varies from 0 to 1 and high values (close to 1.0) generally indicate that a factor analysis may be
useful with the data. KMO score should be 0.60 to be adequate for testing. KMO score .877
indicates adequacy for testing.

Extraction method: Principal component analysis

Applying SPSS, the principal component analysis (PCA) was carried out to explore the
underlying factors associated with 32 items. The above table shows that 65.87% of variation in
mobile purchasing by the customers is explained by seven factors.

Table 2 - KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling
Adequacy.
.877
Bartlett's Test of
Sphericity
Approx. Chi-Square 2.875
df 496
Sig. .000
International Journal of Managing Value and Supply Chains (IJMVSC) Vol.5, No. 2, June 2014

25


The above table indicates the number of factors those affect customers to choose mobile
phone brands. From the rotation method the following seven factors (table 5) may be
obtained.
International Journal of Managing Value and Supply Chains (IJMVSC) Vol.5, No. 2, June 2014

26
Table 5- Naming of Factors

Factor
no.
Name of
dimension
Item
no
variables Factor
loading







F1






Physical
attributes
1 Camera and video .827
2 Bluetooth .802
3 Multimedia option .800
4 Touch screen .775
5 Memory capacity .772
6 Color display .763
7 Attractive color .753
8 Model/style .684
9 New features .684
10 Design of the phone .669
11 Appearance .608
12 Web browser .597
13 Brand value/quality .504



F2



Pricing
14 Model at reduced price .815
15 Product price .771
16 Special offers .723
17 Reliability .715
18 Dual SIM option .702
19 Family members opinion .597
20 Domestic product .588

F3
Charging and
Operating
facilities
21 Charging hour .751
22 Complexity of operating .602
23 Battery .459
24 Key pad (Bengali or English) .455

F4 Size and weight 25 Small size .872
26 Weight .861

F5
Friends and
colleagues
recommendations
27 Friends recommendation .799
28 Colleagues recommendation .536

F6
Neighbors
recommendations
29 Neighbor recommendation .729
30 Salespersons recommendation .496
31 FM facilities .407
F7 Advertising 32 Advertising .763

6. LIST OF FACTORS: Identified factors are listed below.

6.1 Physical attributes: It is the most important factor. It can explain 30.99 percent of total
variance in customer decisions of mobile purchasing. Physical attributes include all the physical
characteristics of mobile phone like camera, Bluetooth, color, weight and others.

6.2 Pricing: It is the second factor which is capable to explain 10.49 percent of total variance. This
second factor of pricing includes all the price related factors that the customers consider before buying
International Journal of Managing Value and Supply Chains (IJMVSC) Vol.5, No. 2, June 2014

27
mobile phones. It states that the Bangladeshi customers psychology that influences buyers decisions of
purchasing mobile phone.

6.3 Charging and operating facilities: This is the third most important factor. It can explain
6.62 percent of total variance. Charging and operating facilities are taken into account while
customers purchase mobile phones.

6.4 Size and weight: It is the fourth factor that explains 5.91 percent of total variance. There
are many respondents who generally take the size and weight as important issues in buying
mobile phone.

6.5 Friends and colleagues recommendations: This is the fifth factor which explains4.40
percent of total variance. Some respondents take the suggestions from their friends and
colleagues before purchasing mobile phones.

6.6 Neighbors recommendations: It is the sixth factor which capable to explain 4.01
percent of total variance in customer decisions of mobile purchasing.

6.7 Advertising: The seventh factor explains 3.475 percent of total variance. It shows that
customers also make their purchasing decision based on advertisement aired in various media.

7. CONCLUSION

The objective of the research was to find out the underlying factors those have a role to
determine the brands while customers purchase mobile phone. It has been seen from the
previous discussion that there are lots of variables customers consider before choosing
brand of mobile phones. Some of the factors influence customers decision greatly while
others have comparatively low impact on the purchase decision. At the time of survey, it
was observed that various types of facilities are expected by the customers. But this
research work does not deal with the customer expectation. Rather it has tried to focus on
the issues that the customers judge in the existing market scenario.

The research has identified that many factors are deemed as selection criteria of mobile
phone. Not necessarily all the variables influence a person in the same way and same
extent. In case of choosing mobile phone brands, mostly considered factors by customers
include physical attributes, pricing, charging and operating facilities, size and weight,
friends and colleagues recommendations, neighbors recommendations and advertising.

REFERENCES

1. Batra, R and Ahtola, OT (1990). Measuring the hedonic and utilitarian sources of consumer
attitudes, Marketing Letters, vol. 2, no. 2, pp. 159-170.
2. Chernev, A (2003). When more is less and less is more: The role of ideal point of availability and
assortment in consumer choice, Journal of Consumer Research, vol. 30, no. 2, pp. 169-184.
3. Dorsch, MJ, Grove, SJ and Darden, WR (2000). Consumer intentions to use service category,
Journal of Services Marketing, vol. 14, no. 2, pp. 92-118.
4. In-Stat/MDR (2002). The worldwide PDA market: the next generation of mobile computing,
Research Report, Accessed 7 August.
5. Laroche, M, Kim, C and Matsui, T (2003). Which decision heuristics are used in consideration set
formation, Journal of Consumer Marketing, vol. 20, no. 2, pp. 192-209.
International Journal of Managing Value and Supply Chains (IJMVSC) Vol.5, No. 2, June 2014

28
6. Liu, CM (2002). The effects of promotional activities on brand decision in the cellular telephone
industry, The Journal of Product & Brand Management, vol. 11, no. 1, pp. 42-51.
7. Moorthy, S, Ratchford, B and Talukdar, D (1997). Consumer information search revisited,
Journal of Consumer Research, vol. 23, no. 4, pp. 263-277.
8. Moschis, GP (1976). Social comparison and informal group influence, Journal of Marketing
Research, vol. 13, pp. 237-244.
9. Requelme, H (2001). Do consumers know what they want?, Journal of Consumer Marketing, vol.
18, no. 5, pp. 437-448.
10. Swait, J and Adamowicz, W (2001). The influence of task complexity on consumer choice: A
latent class model of decision strategy switching, Journal of Consumer Research, vol. 28, no. 1,
pp. 135-148.
11. Wilska, TA (2003). Mobile phone use as part of young peoples consumption styles, Journal of
Consumer Policy, vol. 26, no. 4, pp. 442-464.